A CIO Blog with a twist; majority of my peer CIOs talk about the challenges they face with vendors, internal customers, Business folks and when things get through the airwaves, the typical response is "Oh I See". Some of you may disagree with my meanderings and that's okay. It's largely experiential and sometimes a lot of questions

Updated every Monday. Views are personal

Monday, September 16, 2013

Process or Relationships ?

Within a span of a week, twice I was asked the same question in
different forums by different people. I don’t know if that was pure coincidence
or what is due to the fact that both belonged to different parts of the world
and thus had different perspectives. In both cases they were curious to get an
alternative view of how CIOs succeed in culturally diverse environments with
dissimilar work ethics and realities. What if anything separates the modus
operandi and style of the CIOs in the East and the West ?

I am not sure if this is a fair comparison or should we be listing the
divergence in the approaches; both adapt well to their realities and both have
had share of success and challenges. Neither can be said to be better than the
other as they address similar opportunities a bit differently. One way of
working cannot be transplanted as-is into the other world and expect success;
even if the second is a part of the same organization in another geography. Thus
global best practices remain good to read, not always workable on the ground.

What separates the CIOs between the West (read US, Canada, and EU) and
East (mostly Asia, though the comparison set is largely India). You will hear
this from almost every vendor doing business in East, and so will you get a
similar message from the CIOs of Indian enterprises or CIOs of the Indian
entities of global companies with business interests in India. Despite the
recognition I have not come across a formal analysis of such differences in the
way of working across markets and geographies.

Everyone agrees that India is a value conscious market; products and
services vend at lower margins and discounting is normal. The outsourcing boom
in India driven by wage arbitration did not leave too much behind for the
Indian companies who had to pay higher wages to get quality skills. Due to this
the services play for the Indian market was taken up by mid-sized companies who
out-priced their bigger brothers who were happy to take the higher margin
business from the West until recession dried up their pipeline.

Software vendors realized that to gain market entry and sustain
business, the discount levels had to be different from their home markets. For
hardware manufacturers the margins stood squeezed to low single digits, enough
to cover marketing and administrative costs, not to make too much money. System
integrators and consultants fared a bit better though not by too much; only the
subject matter experts and high technology professionals could bill at global
rates, in many cases reduced to advisory roles.

CIOs in the West are process driven, like standardization, drive scale
though tools and technologies and create predictable outcomes with great
contracts and Service Level Agreements between the parties. This is fairly well
accepted as a way of doing business and everyone internally and externally
aligns to the order and discipline. There is limited flexibility and exceptions
are indeed rare. Thus everyone knows where they stand and what the terms of
engagement and governance are likely to be.

The East shuns order that takes away individuality; everyone believes
they are uniquely different. Standard solutions are frowned upon as they take
away the flexibility that casts everyone into the same mold. While contracts
are drawn up and SLA signed, they are rarely followed if at all irrespective of
the size of deal or financial implications. If there is a change in reality,
the first thing customer wants is a change in terms of engagement. If there is
an adverse event, SLA is damned, immediate service is expected.

People do business with people and that is reality. Standards can change
because the relationship manager changed jobs; who you know overrules contracts
or SLA. A call to the right person will get you right resources or help resolve
a problem. Relationships score over process every time. Value is paramount and
cost is always expected to go south. It is a delicate balance which everyone
learns to sustain their business interests. So SLA is measured, penalties
rarely enforced; contracts are fought over until signing, rarely referred to
afterwards.

I believe that for a global business to sustain, these differences are
acknowledged and adapted to. There is no other recourse. For the leader, the
CIO, s/he continues to wonder about the debate over the different realities. I
am sure there are nuances to each country, market and culture; a global entity
takes all in their stride. Employees who work across borders get used to this.
For management consultants and their elk, they want to create untenable uniform
models as global best practice. All the best to them !

2 comments:

For the 1st time I read a CIO being candid in public about how contracts are used and how SI is expected to negotiate his way through this maze - actually, pretty much straightforward.

Local scenario is largely true. Internationally, when we were providing outsourcing services for RMS we had a slightly different, even good experience.

Yes, there too the general tendency was "I am always right even when I demand more than SLA and I will invoke penalty clause" but unfair demands got resolved with personal relationship and s phone call. Of course, as a process we had to document every single thing, but relationship of trust, competence and genuine attitude of honesty always worked in our favour and penalty clause was never touched in reality.

No matter west or the east, they may be opinionated in various negotiations that benefit the organization on the whole, While I have witnessed to both sides in the last two decades, I am more of a believer that, In the west, the approach to result in a bid however big or small it is more of a demo walk-through and precise, while in the east, its the people skills that matter most, not what you bring to the table. Specifically in the services industry, when you cannot judge the partner's capability in providing the services and taking the risk, the same in the west is welcomed. In the west, the paradigm is not only about the cost,the innovation is fostered in order to add-real value while still addressing customers to retain control of their departments.